Spain rejects socialism—only three percent of EU citizens now have Left-wing governments

By Daniel HannanLast updated: November 21st, 2011

Congratulations to Mariano Rajoy, whose Partido Popular has won a thumping victory in Spain: nearly eleven million votes to the Socialists’ seven million, 186 seats to their 110. It’s not often that you get the same headline in ABC and El País, but a result on such a scale allowed no room for interpretation: the two old rivals agreed that Spain had entrusted her future wholly to the conservatives.

The achievement is all the more remarkable because, while the Socialist Party (PSOE) picks up votes from Left-of-Center voters across Spain, Right-of-Center voters in Catalonia and the Basque Country tend to support local autonomist parties. This means that, in order to win an overall majority, the PP traditionally has to outpoll PSOE by a large margin in the rest of the country. It did so on this occasion. Four of Spain’s 50 provinces are in Catalonia, and three in the Basque lands. Of the remaining 43, the PP won 42 (plus Álava in the Basque Country for good measure). In Castilian-speaking Spain, only the citadels of orange-scented Seville poke out above the blue tide.

Thank Heaven the result was decisive. In Greece and in Italy, elected premiers have been toppled in favor of Brussels placemen, and a hung parliament might have opened the door to an eventual Euro-putsch in Spain. Both sides in Spanish politics have, in the past, been equivocal about the verdict of the ballot box. Everyone knows that Spanish conservatives refused to accept the Left’s narrow victory in 1936. What is often forgotten is that republicans were every bit as reluctant to accept the Right’s victory two years earlier. A long history of uprisings and pronuncamientos meant that democracy was widely seen as a means to an end rather than as a desirable system in its own right.

Happily, no one can now question the PP’s mandate. Throughout the campaign, Rajoy promised to cut the debt and get people back to work by reforming Spain’s sclerotic labor laws. The indignados turn out to be very much minoritarios: the little, shriveled, meager, hopping, though loud and troublesome, insects of the hour.

If he wants to succeed, the new prime minister will have to press his advantage immediately. Spain could easily go the way of Portugal and Greece, and Rajoy’s task is all the harder because, as long as Spain remains in the euro, the pain will not be accompanied by any obvious gain. Years of unleavened austerity loom, and voices from the PP’s own statist tendency will start to demand that ministers “do something”—meaning “spend more”.

One of the curiosities of contemporary Europe is that, while people keep voting for Rightist parties, nothing much changes. Only three percent of EU nationals now live under Left-led governments (those in Austria, Denmark, Cyprus and Slovenia—I don’t think we can count Greece any more). Yet spending continues to rise (except on defense), bureaucracies continue to grow, powers continue to shift from national capitals to Brussels. Which brings us up against a hard truth. As long as most laws come from Brussels, and as long as economic policy comes from Frankfurt, it really doesn’t matter how you vote.

Can gold save the eurozone?

By Catherine TymkiwNovember 23, 2011: 9:17 AM ET

NEW YORK (CNNMoney) — With no end to the eurozone debt crisis in sight, there has also been no end to the stream of possible solutions. The latest involves using gold as collateral.

With eurozone central banks holding some 64% of the world's gold reserves, they'd have the heft to back that up.

And there is some precedent, though that was largely during the pre-euro era. So it is unclear what legal hurdles might need to be overcome to satisfy all 17 euro-area nations.

But assuming those challenges could be addressed, experts see it as a real win-win possibility.

"Historically it's not unusual for a country to use gold as collateral," said Jeffrey Nichols, managing director of American Precious Metals Advisors in New York.

The idea of using gold as collateral was rumored to be part of a broader proposal unveiled by the European Commission Wednesday. Although that plan did not specifically discuss the notion of gold as collateral, experts said it's still a plausible scenario.

Eurobonds: The 'solution' that just won't stick

The EC's plan did detail three different options for eurobonds, an idea that's been floated around before and one that's been met with staunch resistance from stronger eurozone countries, such as Germany.

"I think it was wrong of Germany to dismiss it out of hand," said Robin Bhar, senior metals analyst at Credit Agricole in London. "If we're moving toward the end game, then everything should be ruled in and nothing should be ruled out."

While that's not enough to solve all of Europe's problems, it could offer a step in the right direction, especially if it piques the interest of, say China — a country that has been lukewarm at best about how involved it wants (or doesn't want) to be.

Nichols said that "given China's thirst for gold," it could very well become interested in offering some type of financial assistance to eurozone countries in distress.

And if the eurozone countries don't want to go 'all in,' it's conceivable that at least one country could try the collateralization route — barring the potential legal hurdles.

"It's quite possible that one of the central banks could use gold as collateral for refinancing," he added.

Italy's central bank has the fourth-largest gold reserve holding, at 2,451 metric tonnes. And it's also the country that's attracting the most attention recently, for its burgeoning debt load of €1.9 trillion, a GDP-to-debt ratio of 120% and steep borrowing costs that are keeping its 10-year yield stuck uncomfortably close to 7%.

European debt crisis drives gold rush

What would all this mean for the price of gold? Assuming the plan gets enough support, both Bhar and Nichols see it as a positive.

"It would give a sense that gold held by Euro debtor nations would be less likely to flood the market and give legitimacy to gold having some monetary value," said Nichols.

Just a few months ago, gold prices came within spitting distance of $2,000 an ounce. Currently, prices are hovering around $1,700 an ounce.

23.11.11 @ 17:45By Leigh Phillips

BRUSSELS — The European Commission has proposed perhaps the most radical shift in decision-making away from parliaments and toward unelected bodies in the history of the European Union.

Under proposals unveiled by the EU executive on Wednesday (23 November), while formal domestic lawmaking procedures are to remain in place, almost all fiscal policy decisions would be taken out of the hands of national assemblies and delivered up to European civil servants.

The far-reaching proposals instantly provoked accusations of a hollowing out of democracy in Europe — allegations that the commission has angrily dismissed, saying the moves are necessary if the euro is to survive.

Under pressure from markets to deliver tighter economic integration in the eurozone, the EU executive has proposed that governments in member states that use the single currency be forced to submit their budgets to both the commission and the eurogroup of states for vetting — before they are submitted to their own national parliaments.

If the commission does not like what it sees, it can demand changes to the budget, as well as other mid-term plans a government may have for its economy.

Those countries that have exceeded EU rules on the size of their debt and deficit would also be subject to tighter monitoring by Brussels and would have to submit regular reports on how they are progressing in trying to correct the situation.

The commission would be able to issue recommendations for how this should be done.

All eurozone states would also be forced to create independent fiscal councils — bodies of 'experts' unaccountable to parliaments — who would issue budgetary and economic forecasts. A country's budget would in turn have to be based on the reports of these fiscal councils.

For countries in deeper troubles and facing serious financial difficulties, Brussels could send teams of inspectors — akin to the 'Troika' monitors sent to member states that have received bailouts. The overseers could be sent to any state that the commission decides, even if the county has not requested any international assistance.

The commission is also seeking the power to recommend to the Council of Ministers, representing the member states, that a country should take a bailout. While this remains only a recommendation, the market pressure resulting from such a call in effect renders this new power equivalent to an order to take out a rescue program.

The bloc's economy chief explained to reporters that it was necessary to be able to force countries to agree to bailouts against their will.

"Recent experience has shown that a member state normally wants to avoid a program until the very last moment," he said in the EU capital. "This has caused the situation to worsen in the meantime both for the country concerned and for the whole euro area and increased costs to other member states and increased the financing needs as well. There are no volunteers for an EU-IMF program."

'Scaling back democracy'

The unprecedented proposals come at a time when commentators, trade unions and even editorial cartoonists have made much of the EU's imposition of technocratic administrations on Greece and Italy.

For some in the European Parliament, this goes one step too far.

The center-right in the European Parliament, the European People's Party, warmly embraced the commission's proposals, saying that national budgets must be developed with "guarantees of independence", and the center-left Socialists and Democrats welcomed "strong surveillance and control over the implementation of national budgets."

But the commission was also accused of undermining democracy by the Greens on the left of the house and of launching an assault on national sovereignty by the European Conservatives and Reformists (ECR), the anti-federalist grouping to the right of the EPP.

"The EU is doing what it does best: creating new rules and layers of governance that undermine national sovereignty," said MEP Jan Zahradil, the Czech chairman of the ECR.

The proposals "are fundamentally flawed by the complete absence of any democratic check or legitimacy," said Green MEP Philippe Lamberts, the group’s economic policy spokesman.

"Simply giving far-reaching budgetary surveillance powers to EU technocrats, with no built-in democratic checks, would amount to a scaling back of the democratic process," he said.

Questioned by journalists over whether the moves do not insulate decision-making from elected chambers, commission President Jose Manuel Barroso said he did not wish to engage in "philosophical debates".

He said that national budgets would still be prepared by governments and that national parliaments "will of course have the final say”.

He argued that the request for closer economic integration was issued by the eurogroup, and so while there would be a delegation of responsibilities to the commission, ECB and eurogroup itself, this transfer of powers was voted on by elected representatives.

“It was their decision ... So in terms of democracy, let’s be clear. When democratic member states in full respect of constitutional rules entrust some entities with some powers, this is a fully democratic process and absolutely in respect of democratic principles.”

He compared the transfer of oversight of fiscal policy to the transfer of monetary policy to central banks that has occurred in many countries over the past two decades.

"Just as in our own countries, when we give some powers to a central bank, it is of course not accountable to a parliament, but of course the central bank was created through democratic procedures and is an institution that is absolutely built on a sound democratic architecture."

He said that without these moves, the euro could collapse: "It will be difficult if not impossible to sustain a common currency."

Re: EUEUEUEUEU Germany wants to shrink eurozone down to 10 members

Germany, France examine radical push for eurozone integration

By Luke Baker and Julien ToyerSun Nov 27, 2011 5:58pm EST

BRUSSELS (Reuters) — Germany and France are exploring radical methods of securing deeper and more rapid fiscal integration among eurozone countries, aware that getting broad backing for the necessary treaty changes may not be possible, officials say.

Germany's original plan was to try to secure agreement among all 27 EU countries for a limited treaty change by the end of 2012, making it possible to impose much tighter budget controls over the 17 eurozone countries — a way of shoring up the region's defenses against the debt crisis.

But in meetings with EU leaders in recent weeks, it has become clear to both German Chancellor Angela Merkel and French President Nicolas Sarkozy that it may not be possible to get all 27 countries on board, EU sources say.

Even if that were possible, it could take a year or more to secure the changes while market attacks on Italy, Spain and now France suggest bold measures are needed within weeks.

As a result, senior French and German civil servants have been exploring other ways of achieving the goal, one being an agreement among just the eurozone countries.

"The goal is for the member states of the common currency to create their own Stability Union and to concentrate on that," German Finance Minister Wolfgang Schäuble told ARD television on Sunday.

Another option being explored is a separate agreement outside the EU treaty that could involve a core of around 8-10 eurozone countries, officials say.

An even more pressing decision faces eurozone finance ministers when they meet on Tuesday.

Detailed operational rules for the eurozone's bailout fund, the European Financial Stability Facility (EFSF), are ready for approval, documents obtained by Reuters showed.

The approval of the rules will clear the way for the €440 billion facility to attract cash from private and public investors to its co-investment funds in coming weeks, which, depending on interest, could multiply the EFSF's resources.

With Germany rigidly opposed to the idea of the ECB providing liquidity to the EFSF or acting as a lender of last resort, the eurozone needs a way of quickly calming markets, where yields on Spanish, Italian and French government benchmark bonds have all been pushed to euro lifetime highs.

Policymakers hope progress toward tougher fiscal rules will also assuage investors. Schäuble said a Stability Union could be a decisive step to winning more confidence from the markets.

"That means that every eurozone member has to do its homework on its budget discipline. We want to ensure that through treaty changes," he said.

Radical Overhaul

Reuters exclusively reported on November 9 that French and German officials were discussing plans for a radical overhaul of the European Union to establish a more fiscally integrated and possibly smaller eurozone.

"The Germans have made up their minds. They want treaty change and they are doing everything they can to push for it as rapidly as possible," one senior EU official involved in the negotiations told Reuters. "Senior German officials are on the phone at all hours of the day to every European capital."

While Germany and France are convinced that moving toward fiscal union — which could pave the way for jointly issued eurozone bonds and may provide more leeway for the European Central Bank to act forcefully — is the only way to get on top of the debt crisis, some other eurozone countries are unable or unwilling to move so rapidly toward that goal.

Not only Greece, Ireland and Portugal, which are receiving EU/IMF aid, but also Italy and Spain and some east European countries such as Slovakia, would either find it difficult under current economic conditions to meet the budget constraints Germany wants, or simply do not agree with the aim.

Consequently, the French and German negotiators are exploring at least two models for more rapid integration among a limited number of eurozone countries, with the possibility of folding that agreement into the EU treaty at a later stage.

Two Models

One is based on the Pruem Convention of 2005, also known as Schengen III, a treaty signed among 7 countries outside the EU treaty but which was open to any member state to join and was later acceded to by 5 more EU states plus Norway.

Another option would be to have a purely Franco-German mini-agreement along the lines of the Elysee treaty of 1963 that other eurozone countries could also sign up to, officials say.

"The options are being actively discussed as we speak and things are moving very, very quickly," a European Commission official briefed on the discussions told Reuters.

One source said the aim was to have the outline of an agreement set out before December 9, when EU leaders will meet for their final summit of the year in Brussels.

Sarkozy, who has made two speeches in the past two weeks highlighting the need for more rapid fiscal integration in the eurozone, and has acknowledged that it may be inevitable that a 'two-speed Europe' emerges, is due to make another keynote address on December 1 which could provide a platform for laying out in more detail the ideas that he and Merkel are developing.

A senior German government official denied there were any secret Franco-German negotiations, but emphasized that both countries saw the need for treaty change as pressing and were exploring how to achieve that in the best way possible.

"Germany and France are continuing to focus on proposals for a limited treaty change that can be presented at the EU summit in December," the official said, emphasizing that there was a need to act quickly to get changes in place.

The ECB has bought the bonds of eurozone strugglers in intermittent fashion when they have reached crisis point. Economists say it has to act much more radically to turn the market tide but the central bank, and Germany, has opposed any such move. Commitments to binding fiscal rules by eurozone governments may be the cover it needs to change tack.

"If this bond run is not stopped it will really endanger the stability of the European and even the global financial system. Bold action by the ECB is definitely needed," Peter Bofinger, one of the five "wise men" who formally advise the German government on the economy, told Irish state broadcaster RTE.

Reuters reported a similar possibility on Friday, with eurozone officials saying that if much tighter fiscal integration could be achieved among eurozone states, it would give the ECB more room to maneuver and buy sovereign bonds.

While EU officials are clear about the determination of France and Germany to push for more rapid eurozone integration, some caution that the idea of doing so with fewer than 17 countries via a sideline agreement may be more about applying pressure on the remainder to act.

By threatening that some countries could be left behind if they don't sign up to deeper integration, it may be impossible for a country to say no, fearing that doing so could leave it even more exposed to market pressures.

"Some of this is just part of the posturing you hear — it's pressure from Germany to go for treaty change as quickly as possible," the official involved in the negotiations said.

"To some extent you have to see these ideas as part of the bargaining chips that are being put on the table."

Is Germany using its jackboot, like Bismarck?

Sara MooreWednesday, November 16, 2011

In January 1871, after the end of Bismarck’s successful war against France, a celebration was held at the Versailles Palace, near Paris, to mark the foundation of unified Germany. It comprised almost exactly the same number of states as in the European Union today, and was similarly unequal in size, ranging from mighty Prussia down to tiny principalities. Like the present leaders of the European Union, Bismarck decided to have a new currency.

Bismarck and the stock market crash of 1873

It was much easier for Bismarck to whip the four kingdoms, six grand duchies, five duchies, seven principalities, and three republics, each with its own constitution and representative system, into a fiscal union than Chancellor Merkel and President Sarkozy with the eurozone, because of his success in battle.

Germans indulged in a huge stock-market spending spree after their victory over France, sparking an investment flurry everywhere. Then, flush with French gold from the spoils of war, Bismarck decided to raise interest rates, cease minting silver, and to institute the popularly named Goldmark only two years after unification. This caused the international value of silver to plummet. Money became scarce and the Vienna stock exchange collapsed, followed by Berlin and Wall Street. Austrians would rant against the ‘unwise expansion, insolvency and dishonest manipulation’ of the Vienna stock exchange for years.

Germany in the depression after 1873

In the aftermath of the 1873 stock exchange debacle, Germany and the whole of the western world suffered a long depression. Yet Bismarck realized that the foundation of Germany’s success would be a strong economy and he was prepared to help to enable it to succeed. Although the private German banks lost their power after 1870, and many small banks collapsed, the newly founded Deutsche Bank emerged from the stock market crash unscathed and soon became the right-arm of industry. Smiled upon by government, the years of depression eventually produced the triumph of German big industry on world markets, under Prussian dominance.

Germany and the 1929 stock market crash

The 1929 crash bore marked similarity with the 1873 crash in that it was associated with the return to the Gold Standard, huge capital flows from Europe to America, and rising interest rates. In addition there was a political dimension, when insiders who had put their trust in Germany suddenly became aware that they had been deceived. In the crash’s aftermath there was a deep depression.

The 2008 crash

There was no spending spree in Germany after the euro arrived. As German wages stagnated, or were lowered, Germans invested their money abroad. Indeed, Britain’s former Prime Minister, Gordon Brown, asserted in his International Herald Tribune article, on 21st August 2011, that the ‘German banks were supplying the drinks’ for the stock market boom in America and Southern Europe. Naturally, others joined in the party. Indeed, it seemed as though the world was awash with cash. Eventually, however, the European Central Bank started to raise interest rates. Then the ECB, egged on by the Bundesbank, raised them yet again, first to eradicate internal, then external inflation. Commodities tumbled worldwide, European money deserted Wall Street and Lehman Brothers collapsed. Many, many books have since been written by the bankers, lamenting their foolishness and greed.

The future?

After 1873 and 1929, we had dreadful depressions. It seems that we are going to have one now. What is worrying is that Germany seems to be using deflation for political ends, as it did between 1930 and 1932. People don’t know exactly why Germany has chosen the present period in which to eliminate its budget deficit but it is making it almost impossible for the weaker eurozone countries to grow their economies, while eliminating their debts. One also has to ask why Germany lent money so wantonly to the PIGS—Portugal, Italy, Greece and Spain—only to transform them into pariah states?

Echoes of the 1930s

The request to the IMF and the rest of the world to help the European Union’s finances is also worrying. In the aftermath of the 1929 stock market crash, it was popularly believed that Germany was weak. Indeed, few people know that in 1930 and 1931, money was lent to Germany from impoverished France, Britain, Switzerland and America to help it pay its debts.However, Germany was not weak in 1931—just using deflation for political ends. Indeed, it was later revealed to be the greatest exporter in the world, with a secret mountain of cash in its coffers. Meanwhile, the money lent to Germany from France, Britain, Switzerland and America at the time, merely made those countries poorer.

The European Union is regarded as weak today, and has asked the whole world to help it with its problems. Yet on the face of it, it does not seem so poor. It has, as a whole, less debt than America. Italy, which is regarded as the next basket case after Greece, has 2450 tons of gold and is the world’s sixth biggest industrial economy—France, which is being made to pay more for loans, is the world’s fifth wealthiest, while Germany is even more powerful. If Germany was not set on deflating in its own economy, it could give other eurozone states the chance to grow and sort out the debts, which were incurred, in part, because of its reckless lending. The very least that it could do is to abandon its plan to eliminate its fiscal deficit by 2015. Otherwise, it will looks as though it wants to shove the jackboot in, to pay off old scores—and dominate, not unify Europe.

Re: EUEUEUEUEU Germany wants to shrink eurozone down to 10 members

They tried to create a United States of Europe without taking into account the inherent differences.

And more to the point, without introducing the inherent subsidy of the poorer regions by the more wealthy.

NY has been subsidizing MS since 1932. That's accepted in the US. But Germany doesn't want to subsidzie Greece forever.

Also, of course, there is the language issue. People from MS have been moving north and west since 1929 and even before then and getting jobs in their new locations, or welfare if they can't find jobs. People from Greece may be allowed to move to Germany but they won't get welfare benefits or jobs there so easily.

Re: EUEUEUEUEU Germany wants to shrink eurozone down to 10 members

Precisely ... no central bank, no central government, and no "national philosophy" ... while Olog's been flailing over it all these years, I've been pointing out how it was doomed to failure until any of these things had been done for real ... and remarkably, as obvious as the signs are now for the EU, they're still not forming a "united" states.

11/29/2011Confounding the Crisis

German Exports Soar above One Trillion Euros

The menacing currency crisis is dominating discussion in the European Union — but the German economy continues to be spared. This year companies there will manage to exceed exports of more than a trillion euros, a figure not even reached during the boom year of 2008.

The economic outlook for euro-countries, including Germany, has deteriorated significantly of late. But the current situation remains rosy for German companies, whose products are in greater demand abroad than ever before.

Within the year, German exports will surpass the €1 trillion mark, the Federation of German Wholesale, Foreign Trade and Services (BGA) reported on Tuesday. Even in the country's legendary boom year of 2008, exports came up just short of the historic number.

Exports are up by 12 percent for 2011 some two months before year's end, with further growth expected for next year, the organization said. In 2012, exports are projected to increase by at least 6 percent to €1.139 trillion. German exports make up some 9.5 percent of world trade, the exporters' association estimates. "Stormy times on the financial markets are accompanied by remarkably stable channels in the real economy," BGA president Anton Börner said.

Jobs Galore

Germany appears to be an island of tranquillity on the labor market too. Despite growing recession fears, there were more open positions available in November than ever. After a brief lull in Sept. and Oct., demand for workers climbed to a record high, the Federal Employment Agency (BA) reported. Two out of three such jobs, however, were offered on a temporary basis. "Companies in Germany obviously want to recruit despite countless uncertainties on the international financial markets," according to the BA.

The situation is attributed to two central factors: First, in good times more workers change jobs than they do during an economic crisis. Second, it often takes time to fill vacancies with qualified workers. Meanwhile the favorable job market has inspired healthy consumer spending among Germans. For the third time in a row the consumer climate rose this month, market research group GfK reported on Monday.

Tensions Remain High

Still, BGA president Börner warned, excess optimism isn't called for. Should the debt crisis lead to a credit crunch, the real economy could quickly suffer, he said, adding that the success of Germany's export-dependent economy relies on the fate of the common currency. Were the euro to fail, the economic and political consequences would be great, he said. "It would mean nothing less than ... renationalization and protectionism," Börner said. "In the end, the Balkanization and marginalization of Europe."

The level of tension in the eurozone is evident from a European Commission barometer, the Economic Sentiment Index (ESI), which surveys the mood among consumers and the service, retail and construction industries. It sank from 94.8 points in October to 93.7 points in November.

The indicator also showed a gloomier economic climate than expected across individual eurozone nations, with France taking the heaviest loss, followed by the Netherlands, though heavily indebted Spain and Italy saw slight improvements. In Germany, the ESI was practically unaltered, down just 0.1 percentage points.

Atheists say EU privileging religious leaders over non-believers

30.11.11 @ 17:53By Leigh Phillips

BRUSSELS — The European Union is keen to involve religious leaders in a policy dialogue, as required by the EU treaties, while consultations with atheists appear to be more of a chore that Brussels is resigned to, representatives of European secularist organizations are complaining.

At the second annual 'summit' in Brussels between the three presidents of the European Union and representatives of atheist groups and freemasons, the secularists demanded to be put on an equal footing with faith communities.

"There is a clear preference for consultations with religious representatives," the head of the European Humanist Federation, David Pollock, told EUobserver.

Under pressure from church groups, and in particular from the Vatican, efforts to involve religious leaders in the crafting of legislation were surprisingly successful with the passage of the Lisbon Treaty, which, under its Article 17, requires a regular dialogue with religious associations, but also with "philosophical and non-confessional organizations".

"We are also concerned about the need for the EU's interpretation of Article 17 to be conducted in a more balanced way," Pollock continued.

"They spend much longer with the religious leaders," he added. "We are kept completely in the dark about how anybody is selected for these meetings. There is no consultation about the subject areas, about who is invited. We do not feel as though we have any ownership over the process at all. There needs to be a new start."

There are also no minutes of the meetings with the religious leaders, nor records of the speeches given by the presidents.

Beyond the regular summits that the three presidents hold with church, temple and mosque leaders, for a number of years, the European Commission has also held 'dialogue seminars' with the two conferences of European bishops.

However, when the European Humanist Federation (EHF) requested a similar dialogue seminar with the commission, on the topic of religious exemptions from EU laws and anti-discrimination legislation, the EU executive refused, saying that the subject lay outside its area of responsibility.

The EU ombudsman on 23 November subsequently requested the commission to explain why it had rejected the proposal for a seminar. The commission must reply by February next year.

According to the EHF, church groups are now pushing for the Article 17 dialogue with them to be "stretched to all levels" beyond the summits and dialogue seminars, with "working contacts" and "quick and efficient exchanges of views" on all subjects. There has also been a request for the establishment of a special office in the European Parliament to deal with religions.

Following the meeting Pollock said that he had been "provisionally reassured" by a commitment by European Commission chief Jose Manuel Barroso to take into account the concerns.

The atheist contingent at the meeting was also wondered why there is such an emphasis on the presence of freemasons. Ten out of the 16 invited came from masons' lodges from different countries. Only six individuals were invited from expressly non-theist organizations.

"While the continental freemasons are distinctly secular, we do question the balance in these meetings. The last meeting, three quarters of those there were freemasons," Pollock added.

At a hearing in the European Parliament later in the day on the implementation of Article 17, MEP Sophie in 't Veld, the head of the chamber's European Platform for Secularism in Politics complained that letters from the platform about how the summit had been organized had gone unanswered.

Vice-president of the parliament Laszlo Tokes, who also stressed the atheist nature of the Stalinist dictatorships of eastern Europe, said that he had not seen any letters and subsequently prevented in 't Veld from speaking, saying that her worries should not be voiced until the president of the parliament, Jerzy Buzek, was present in the room.

Atheists fear for democracy in Europe

The secular summit took as its theme democracy and pluralism in the EU.

According to commission spokesman Jens Mester, those present used the occasion to express their concern that democracy is under threat within the EU in the face of the economic crisis.

"A general concern by really most participants was that in the current crisis, there is a risk that democratic values and liberties are being downgraded," he said.

"There is a worry that there is an increasing separation of the institutions from ordinary people, about the increased powers being assumed by technocrats especially in the context of the current crisis, about what has happened in Greece and Italy," Pollock explained.

"But there is a broader feeling of a disconnect, that with what Europe is going through, democracy is being curtailed. People feel that they have no control over Europe, that everything is being decided for them, without their input," he said. "There is a need for politicians to get back in charge and reassert democracy in Europe."

The three presidents responded with "general reassurances" that democratic values inform all of their work, according to those in the room.

Re: EUEUEUEUEU expanding its technocracy, tearing down democracy

The EU's 'techno party' is hollowing out democracy

30.11.11 @ 12:56By Leigh Phillips

BRUSSELS — Not everybody's into techno music. Some folks are a little bit country; others a little bit rock and roll.

But under what one Brussels wag recently called the EU's 'techno-party' strategy — replacing elected representatives with technocrats and an end to consideration of fiscal policies by parliaments in favor of fiat by civil-servant 'experts' — nobody has any choice any more about what kind of music they want to listen to.

Economic policies will be decided for them, by the experts, by, if you will, those bangin' bureaucrat and banker DJs in Brussels and Frankfurt.

Fiscal policy, like monetary policy, is simply too important for it to be 'politicized', the argument goes. The eurozone cataclysm is so serious that we no longer have time for "political games", as European Commission President Jose Manuel Barroso put it last Monday (21 November), speaking alongside Greece's new unelected leader, ex-European-Central-Bank (ECB) man Lucas Papademos.

And so in Athens and Rome, EU power-brokers have imposed a pair of temporary technocratic governments that claim to be above politics — a former central banker to head Greece and an entire cabinet of technocrats to shepherd Italy along the path of austerity and structural adjustment.

But technocracy is not to be limited to the allegedly wayward southern pair of states. It is such a grand wheeze, believe the project's deep thinkers, that under proposals for deeper economic integration unveiled by the European Commission last week, the unelected EU executive and the ECB are now to dictate national budgets of all eurozone states.

Goldman Sachs has not be made king of Europe

Firstly, let us be clear about what has not happened. Goldman Sachs has not been made king of Europe, as some recent articles in the French press have hinted at, given the association of Mario Monti, Lucas Papademos and the new head of the ECB, Mario Draghi, with the organization that American journalist and professional muck-raker Matt Taibbi described as a "great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."

The reality is far worse than a cabal of undead 'banksters' imposing their will. It is systemic and not a conspiracy by a coterie of Trilateral Commission members, Bilderberg Group attendees or Goldman Sachs staff.

The latest developments are simply the logical conclusion of structures and processes inherent to the way that the European project has been constructed — the famous 'democratic deficit' that has never been fully addressed — and how so much international decision-making is increasingly being achieved. There were EU and International Monetary Fund (IMF) actors who together with the participation of domestic collaborators from both the center-right and center-left orchestrated the ouster of the governments of Greece's George Papandreou and Italy's Silvio Berlusconi and the stultifying consensus of center-left and center-right at the European level has been midwife to imposition of undemocratic economic governance across the eurozone.

The focus must first be on the self-selected Frankfurt Group, the shadowy forum that brings together German Chancellor Angela Merkel, French President Nicolas Sarkozy, IMF boss Christine Lagarde, ECB chief Mario Draghi, eurogroup chair Jean-Claude Juncker, the two EU presidents, Jose Manuel Barroso and Herman Van Rompuy and economy commissioner Olli Rehn. Designed to bypass the often serpentine European decision-making process, the Frankfurt Group has also been the channel through which much of the pressure on the eurozone periphery has been applied.

After Papandreou pulled his 'maverick' maneuver offering a referendum to the Greek people over externally-imposed decade of austerity and restructuring — a gesture denounced by Barroso as "a breach of trust" — the leader was ordered to the G20 summit in Cannes where he was told enough was enough: a national unity government without a popular mandate had to replace his own. The opposition made it very clear that Papandreou had to go if they were to participate in a coalition.

If the private missives were not clear enough, and knowing that a national unity government in effect meant the end of Papandreou, Barroso then publicly said that if the Pasok administration was not sidelined over the course of a weekend, the country could kiss goodbye any hope of receiving the next, €8 billion tranche of its EU-IMF bailout. "I am sure that the majority of the Greek people do not want this kind of chaos," he warned darkly.

The eurozone's de facto government then quickly moved to set loose the Italian buffoon. It is still unclear who precisely took the decision to transform the ceremonial office of the Italian president into a genuine seat of power, which group of lawyers decided that the president's appointment of Monti as senator-for-life — a laurel normally accorded to Italians who have achieved "outstanding patriotic merits in the social, scientific, artistic or literary field" — could work as a springboard for the premiership while overcoming constitutional concerns, or how Monti himself was picked as The One.

But the ECB's tepid purchases of the country’s bonds was signal enough to the markets to let them do their worst, while the IMF's announcement that Rome would be subject to inspections akin to those that Athens, Dublin and Lisbon are subject to — even though the country had not applied for any bailout — tied a cement cinder-block to the leg of the already drowning Italian leader. An official at the time quoted by the UK's Spectator magazine put it: "We're on our way to moving out Berlusconi."

Managing democracy in Portugal

The overthrow of Papandreou and Berlusconi is not the first time a government has been thrown under the bus since the start of the crisis.

The ECB pulled the plug on the Socrates administration in Portugal in spring, when the chief of the central bank ordered domestic banks to stop lending to Lisbon in order to force the prime minister into the arms of an EU-IMF bailout program he was reluctant to sign up to.

In March, Portuguese banks announced they would stop buying government bonds if Lisbon did not seek a bailout. Without the support of domestic banks, Socrates had no choice but to request an external lifeline.

Although the then ECB chief, Jean-Claude Trichet, later denied it, the head of the country's banking association, Antonio de Sousa, said that he had "clear instructions" from the ECB and the Bank of Portugal to turn off the tap. Socrates at this point was a dead man walking. A package of additional austerity measures proposed by the then minority government was defeated when the conservative opposition that would subsequently push through still deeper austerity voted against it. The government immediately fell — the predictable outcome of what Frankfurt had ordered.

Last Tuesday, upon Mario Monti's first visit to Brussels after being installed as premier, Barroso argued that the need to take economic decisions out of the hands of politicians is in fact the EU's raison d'être: "After the the Second World War, the countries that founded the European Community created supranational institutions, and now we have the European Commission, the European Court of Justice and the ECB. Why? Precisely to have independent assessment and monitoring and also if possible independent enforcement mechanisms that are not subject to political maneuvering."

As shocking as the overthrow of a pair of elected governments in Rome and Athens has been, this gelding of democracy is the plan for the entirety of the eurozone, as Brussels made clear last Wednesday.

The already radical shift in fiscal policy making powers from national parliaments to the EU under only recently passed economic governance legislation clearly has not gone far enough for the markets, and, according to fresh legislative proposals unveiled the middle of last week, the commission will now in effect be ordaining national budgets. Fiscal plans must be sent to Brussels for vetting before domestic politicians get a look, and if the commission does not like what it sees, it can order changes.

But even before this stage, countries will have to base their budgets on the reports of independent 'fiscal councils' unaccountable to parliaments. Expert overseers are to be sent to any country the commission deems to be in financial difficulties and, should this new legislation be passed, Brussels will in effect be awarding itself the power to order a country into a bailout program against its wishes.

EU economy commissioner Olli Rehn explained why this was necessary: "Recent experience has shown that a member state normally wants to avoid a (bailout) program until the very last moment," he said in the EU capital. "This has caused the situation to worsen in the meantime both for the country concerned and for the whole euro area and increased costs to other member states and increased the financing needs as well. There are no volunteers for an EU-IMF program," he said, in a clear reference to the recalcitrant Portuguese government of Jose Socrates.

Challenged by journalists to explain how such enormous powers could be taken out of the hands of elected representatives without a serious erosion of democracy, a testy Barroso countered that there is no threat to popular sovereignty so long as the member states in the eurogroup — comprising the leaders of the 17 states that use the single currency — vote to give away these powers to civil servants.

"It was their decision ... So in terms of democracy, let’s be clear. When democratic member states in full respect of constitutional rules entrust some entities with some powers, this is a fully democratic process and absolutely in respect of democratic principles."

He compared the transfer of fiscal policy to independent experts to the transfer of monetary policy to central banks that has occurred in many countries over the past two decades.

"Just as in our own countries, when we give some powers to a central bank, it is of course not accountable to a parliament, but of course the central bank was created through democratic procedures and is an institution that is absolutely built on a sound democratic architecture."

'Diseased democracy'

But Barroso is far from alone in expressing such contempt for politics. The breadth of support for this objectively anti-democratic response to the crisis is chilling.

Most mainstream parties have signed up to the rule of the technocrats. In the European Parliament, conservatives, liberals, and social democrats have consistently since the start of the crisis voted in favor of drives toward deeper economic integration that takes decisions out of the hands of elected chambers. Indeed, the sole EU institution with a direct electoral mandate has gone further in insisting on a gelding of democracy than even the commission or Council of Ministers would have done.

One journalist colleague, arguing that trusted, proven and capable technocrats are superior to elected representatives, recently tweeted: "Monti and Papademos are not the end of democracy. They are the cure against its chronic diseases."

A different colleague who does worry about what is happening to European democracy noted how an Italian friend goes even further in his disillusionment with the vote: "It's not like democracy has been working so great for us ... I felt powerless before with Berlusconi in power. At least this way I'll be powerless with a competent government."

Indeed, one of the main defenses mounted by EU leaders against accusations of the overthrow of democracy in the south is that a majority of Greeks and Italians support the new technocratic administrations.

On the day that Monti announced his government composed entirely of unelected technocrats, bankers and diplomats, a poll for La Stampa newspaper by the Piepoli Institute put support for the new administration at 73 percent.

And three separate polls taken just after Papademos assumed office showed that between 72.9 and 79.1 percent believe the establishment of an emergency technocratic government to be "positive".

These four defenses of technocracy appear at first glance to be powerful arguments, so it is useful to restate them boiled down to their essence:

Politicians are a bunch of scheming idiots that 'politicize' the process and the experts, free of private interests, know better;

There is little difference between the establishment of independent central banks and making fiscal policy independent of politics;

The Council of Ministers, representing elected governments, has voted to hand over power to the commission and ECB; and

The Greek and Italian people back the new governments.

But ultimately, all four represent the same appeal to elite rule rather than rule by the people. It is essential given the gravity of what is happening to revisit precisely what we mean by democracy and not take as a given that those who claim to defend it indeed do so.

Philosopher kings

Let us unpick the four arguments in reverse order.

The appeal to passing popularity in the polls offers no proof of democratic accountability. However popular a king may be, this fact does not make a monarchy a democracy. A more contemporary example could be to say that the popularity of Russia's Vladimir Putin lessens in no way his hollowing out of democracy in that country.

Of course, as far as support for the new regimes in Greece and Italy is concerned, it is more than understandable that people should cheer the fall of the vile, unprosecutable Berlusconi. Indeed, watching the overthrow of Berlusconi was akin to watching a football match between two teams you hate: you want them both to lose. And Papandreou was so reviled for his imposition of austerity that has so impoverished his people that a change, any change, might bring hope.

Thus this 'pox on both your houses' attitude of regular voters comes from a very different instinct to the elite idea that governance needs to be de-politicized, even if this disillusionment that ordinary people have in the political class unfortunately dovetails very easily with the contempt the political class has for ordinary people.

It need hardly be mentioned that language describing democracy as 'chronically diseased,' as my colleague suggested, has a very sombre European precedent indeed. It was precisely this popular disenchantment with politicians that has at dark times in the past allowed strongmen to arrive, welcomed by flag-waving crowds and promising an end to tribulation.

The passage of decisions from elected individuals, however flawed, to those without any popular mandate has always been a precursor to an even more fearful shackling of liberties.

Some even at the top of the EU are quite aware of these very risks and do not expect the strategy to be successful for very long. One senior EU character whose identity this reporter has been sworn to not reveal on pain of defenestration, recently opined that the popularity of Monti and Papademos will likely only last a few weeks or months at most, until the technocrats begin to execute austerity measures and structural adjustment — the very reason that they have been parachuted in.

If one polled the electorates of any number of countries, not just Greece and Italy, large numbers of them might support the arrival of Platonic philosopher kings. Yet as soon there is an unpopular decision, then people will begin to say: 'Who are these people? Who elected them?'

Remember that Berlusconi himself arrived on a wave of popularity based on the idea that as a wealthy businessman, he was above politics and incorruptible.

'Too important' for democracy

The argument that the assumption of power over fiscal policy by unelected experts remains a democratic move because Eurogroup leaders have voted to do so is equally easily dismissed.

Elected representatives have many times in history voted to pass decision-making power over to unelected figures. Indeed, such developments have regularly been a precursor to autocracy. It should be self-evident that voting away democracy is an insuperable contradiction.

But one can go further and also ask how democratic the eurogroup or Council of Ministers or European Council (all of which are variations on the same intergovernmental theme) actually are. They are only indirectly elected, and at no point are these senate-like formations ever confronted with general elections, despite their legislative power.

Policy in these closed chambers is essentially decided by unelected diplomats long before anything arrives on a minister's desk in any case. Far away from public scrutiny, everything from climate policy to agricultural subsidies and food labeling are wrapped up in the kind of secrecy that historically had once been the sole preserve of the building of foreign military alliances and peace negotiations. Beyond just concerns about economic policy being insulated from democratic influence, all these areas of policy making must be snatched away from the diplomats and returned to the democratic arena.

And the argument that monetary policy has anyway long since been taken out of the hands of politicians and given to 'independent' central banks and so now is the time for fiscal policy be made 'independent' as well — in essence is defended by the same logic: that it was elected representatives over the past two decades that voted to outsource this key policy area and thus the move is grounded in a democratic process.

But we must ask why was monetary policy ever allowed to be removed from the field of democratic contest in the first place? We have seen in the last few months how powerless elected leaders are in attempting to press the ECB into doing what must be done.

There is no policy area that is 'too important' for democracy.

Furthermore, if monetary policy has long been insulated from politics and now fiscal policy is to be as well, what on earth is now left for an elected chamber to deliberate on? Judicial and foreign policy? Why not abandon these fields to the ‘experts’ as well? Why bother with elections at all?

Jefferson vs. Hamilton

But the toughest argument of the technocrats to counter is the one that exploits the quite-understandable popular contempt for the current generation of politicians, the argument that pretends to be the tribune of this legitimate frustration.

However sympathetic one may be on the face of it to the view that politicians are vile creatures, the implicit suggestion in the idea that now is not the time for "political games" is that politics is mere sport, a distraction that sullies and perverts the One True Path for a society, at all times known by economists (and at that, only certain flavors of economist). It is all right for this dilettantism to proceed at normal times, but, confronted with the worst crisis since the Great Depression, the potential destruction of the eurozone and even the European Union, we must put away these childish things, even if only for a brief period.

Consider for a moment the utter contempt for democracy that silently inheres in such an attitude.

What is democracy but the battle between political ideas — sometimes slightly different, sometimes profoundly or even radically different — and the ability of voters to choose between them? Doing away with politics is the same as doing away with democracy.

And even further beneath such sentiment lies a still darker cynicism, not just about politics but about people themselves. A common complaint one hears in the bars and cafés of the European quarter in Brussels is that people are far too stupid, too ignorant of what is in their own best interest.

On many occasions, EU officials have said privately that governments need the discipline of markets, otherwise they would just keep spending and spending in order to win votes. If we unpack this, this is equivalent to saying that the markets know better than voters, than people.

Yet what are markets, but the actions of people, albeit wealthy, institutional investor-type people? It must then be concluded that those who put forward this argument do not in fact believe that all people are too stupid, just that most people are — apart from those with sufficient wealth to play the markets. Elites, in other words.

This is not a new perspective, but is instead one side of an old debate that dates back to the earliest days of modern democracy.

At the time of revolutionary France and America, some favored an extension of democracy to the widest possible geometry. Others viewed the masses with suspicion and, while opposing absolute monarchy, felt that it would be in society's best interest if the cleverest, most educated and most virtuous held the reins of power. At the birth of the United States, the more egalitarian Thomas Jefferson, believed in equality of political opportunity (admittedly only to white males) and favored "plain folk" and the "yeoman farmer" over the "cesspools of corruption" inhabited by financiers, bankers and industrialists. His nemesis was the proto-technocrat Alexander Hamilton, who feared ordinary people’s capacity for self-government, the tendency of them for "factiousness" (i.e., politics) and the "unsteadiness" of governments, preferring rule by elites instead.

"Complaints are everywhere heard from our most considerate and virtuous citizens ... that our governments are too unstable and that the public good is disregarded in the conflicts of rival parties," he wrote in the Federalist Papers.

The echo of Hamilton can be heard today down Bruxellois, Parisian, Berliner and Frankfurter corridors.

Quis custodiet ipsos custodes?

But we should go further still, and disabuse ourselves of the idea that there can ever be some group of individuals that is free of political ideas or of a set of private interests that they serve, that there are virtuous men and women that will benevolently, competently watch over us independent from political selection.

Let us assume that there is out there some group of 'experts' that is genuinely distinct from Hamiltonian elite interests and at the same time that really do know better than regular people what is in the best interest of society.

These imaginary experts would have to present their ideas and list their interests and be checked by, well, whom? Is there a group of technocrats that are expert in choosing technocrats? And if so, how is that group checked? The proposition leads to infinite regress. Alternately, if we say that technocrats are by definition self-selecting, how is this different from dictatorship, when the ruler places himself in power upon his own authority? This is Napoleon crowning himself emperor.

So the only possible answer to Juvenal's question is: We do. We, the citizens of Europe, are the only ones capable of watching out for our own interests. And if we are the ones watching the watchmen, this is the same as saying that we are electing them: We are electing politicians.

We like elections, but we do not like politicians. But you cannot have one without the other. Politics is inescapable.

And indeed, our real-life group of experts, whether in Brussels and Frankfurt or now Athens and Rome, are in the end very much politicians too, just ones of a very particular ideological stripe and over whom we have the most attenuated democratic control.

The evidence of this is given by comparing what happened ahead of the elections in Spain to what happened ahead of elections in Ireland, Portugal and even Finland. In the latter cases, EU and ECB officials — the technocrats — sharply remonstrated to domestic political parties that national consensus was required and lectured voters that they had a "responsibility" to, in effect, vote the right way.

Yet there were no such admonitions in the weeks leading up to the Spanish vote. If national consensus is imperative in the current climate, why did such exhortations fail to materialize?

The reason is that it was long since clear from the polls that those voters that might have challenged the austerity consensus — the program of measures the EU technocrats demand — were disillusioned with the center-left government of Zapatero and were going to stay at home or drop blank votes into the urns, giving the right a clear run at an absolute majority.

So national consensus and technocratic rule appear only necessary when the market-fundamentalist right does not have an absolute majority. Berlusconi's government may have been of the right, but there was no absolute majority in favor of all the austerity that was demanded. From this, it follows that the technocrats are not in truth indifferent experts at all, but experts of a particular hyper-free-market flavor. Keynesian experts for example need not apply.

The 'Techno Party' may come dressed up as a coterie of independent academics and specialists, but is in fact the party of the market, composed of the very same people that created the crisis in the first place.

"What is pretending to be a technical, consensus solution, above the fray of politics, is itself deeply political and this is being hidden from the European people,” says Niccolo Milanese, the director of European Alternatives, a Rome-based EU affairs think-tank that has been critical of the drive toward technocracy.

"Under the guise of technocratic governments, a series of policies is being foisted upon them as if there is no choice," he argues.

"The correct response to the crisis is not less democracy, but more; not cozy consensus, but rather the reinvention of clear, stark ideological choices with parties presenting competing visions of which direction we want society to go in."

Given the utter capitulation of Europe's social democratic parties to the will of the Techno Party — Papandreou and Socrates were both men of the left while Italy's center-left party, the Democrats, has given Monti a blank check — this is a big ask. Can we really say that there is a stark ideological choice between left and right, at least on economic questions, any more? What force is able to take the Techno Party on and present an alternative vision of Europe?

The solution to the problem of the current class of politician that pays no heed to the interests of ordinary people is not to do away with politicians in favor of 'experts', but to elect a better class of politician that will represent our interests.

But this does require a new politics and a democratization of Europe. And this will only happen when the Greek and Italian people themselves, alongside the Spaniards, Portuguese and Irish, and all Europeans together refuse to keep dancing to the techno beat.

It is time for all those who hold democracy dear to speak out against these moves without fear of being cast as euroskeptics. Indeed, if one believes in Europe, we must speak out all the more loudly. In counterposition to the anti-democratic panic in the chancelleries of Europe that has led to the rule of the Techno Party, it is time to burn down the disco and, as the song says, hang the blessed DJ.

Because the music they constantly play says nothing to ordinary Europeans about their lives.

New Front Emerges in Clone Wars

By SHANE ROMIG in Buenos Aires and JOHN W. MILLER in Brussels

The European Union is preparing restrictions on the sale of meat derived from cloned animals, opening another front in the battle over food engineering with modern farm powerhouses like Argentina, where farmers increasingly clone prize pigs, cattle and sheep.

The European Commission, the bloc's executive office, is working on a proposed ban or strict labeling plan for the import of meat, dairy and other products from the descendants of cloned animals, say EU officials.

The EU doesn't import much meat, but the fight is part of a broader tussle over the future of global agriculture, mirroring disputes over genetically modified organisms, beef hormones and chlorine in poultry production.

Argentina, meanwhile, is emerging as the standard-bearer for cloned meat.

Five separate pioneering operations in the South American country have filled their pens with successful clones, enjoying support—and little interference—from government, private companies and universities.

"There's no scientific reason to regulate cloning," said Alejandro Silva, chief of staff at Argentina's agriculture ministry. "In five to six years, Argentina will be the world's largest exporter of cloned and transgenic products [but] we need to get past EU resistance."

As makers of genetically modified crops have found, getting past Europe's sometimes obsessive aversion to "Frankenfoods" can take some doing.

Most EU countries, save Denmark, allow the import of meat derived from clones, but with 58% of Europeans against the notion, says a European Commission "eurobarometer" poll, regulators in Brussels are debating a ban before the practice becomes more commonplace.

There are currently fewer than 1,000 cloned cattle, pigs, goats, horses and mules in the world, says the Washington-based Biotechnology Industry Organization, but their numbers are rising and the costs falling.

A 2009 report by the Parma, Italy-based European Food Safety Authority concluded that cloned foods aren't unhealthy for humans but that cloning—in particular the surgical procedures used to inseminate surrogates and the high death rate in the cloning process—amounted to a form of animal cruelty.

"A lot of these animals get diseases," said Kartika Liotard, a member of the European Parliament from the Netherlands, who is leading the debate in the Parliament.

With a price tag of as high as $25,000 each, the clones aren't expected to be used directly for meat. Most of their value is in breeding, Dr. Edwards said.

Ms. Liotard and other European Parliament members are seeking rules that are as tight as possible, including a moratorium not just on cloned animals but also on meat from the offspring of cloned animals. At the very least, they want strict labeling that would effectively blunt imports of these meats due to the added costs. That has caused the European Council, which comprises EU heads of government, to warn of a trade war.

In March, negotiations between EU governments, the commission and the Parliament aimed at regulating imports into Europe of meat and dairy products from animals bred from clones broke down.

The European Parliament "wants a misleading, unfeasible solution that in practice would have required drawing a family tree for each slice of cheese or salami," said Sandor Fazakas, farm minister for Hungary, said at the time. Mr. Fazakas and his government support allowing cloning in the EU.

"It's very sensitive issue, and we're still reflecting," said Frederic Vincent, a spokesman for John Dalli, commissioner for health and consumer politics. The commission will propose legislation in 2012, although it hasn't yet set a date, he said.

If the commission delays its proposal, the Parliament will propose its own law, Ms. Liotard said.

Such an EU move is sure to irritate major beef exporters like Brazil, Australia, Argentina and the U.S., who are each experimenting with cloning and have joined together in encouraging other governments to support the practice.

Argentina is pressing on ahead in any case. At the Cabana Milenium biotechnology lab in Buenos Aires province, scientists have cloned 11 animals, including goats, sheep, pigs and the star of the show, Pascual, a clone of one of the country's top Bradford bulls.

The owner, Miguel Mellano, displays a picture of him and President Cristina Kirchner together with a goat named Libertad, the child of two clone parents. The company also offers cloning services that will be introduced into conventional breeding, Mr. Mellano said.

"Technological development is one of my obsessions, because that's where we are going to make our agricultural advantages competitive," Mrs. Kirchner said during a visit to Milenium last year.

To clone livestock, scientists take samples from the skin of prized animals, extracting its DNA and replacing the DNA of a developing embryo with that of the desired parent. The embryo is placed in a surrogate that gives birth to an exact genetic copy of the prized animal.

Despite the U.S. conclusion that meat and milk from clones and their offspring pose no additional risks, the industry needs to make efforts to inform the public about how cloning works to overcome resistance, said Larisa Rudenko, Senior biotech advisor for the U.S. Food and Drug Administration.

The U.S. Department of Agriculture has asked that meat producers voluntarily keep clones, but not their offspring, out of markets which have said they don't want it.

Those measures are due to worries over the "yuck factor," as most people don't understand how cloning works and the science behind. Ms. Rudenko said. "Hollywood has taught the public about cloning."

Contagion Catastrophe

Europe is closer than you think to bringing down the American—and, therefore, the global—economy.

This is the worst-case scenario from Europe, and it just might come true: Italy defaults on its debts. Every major Italian bank collapses. Recession grips the eurozone. Sovereign defaults and bank failures ripple across the Continent. Saddled with bad loans to nations and lenders in Europe, American banks hemorrhage cash. Credit freezes in the United States. Multinational companies, unable to raise money, curb U.S. investment and hiring. Wall Street demands, but fails to get, new bailouts. The entire developed world plummets into recession and, quite possibly, depression.

This, in contrast, is the placid warning that President Obama gave Americans about the threat: “If Europe is contracting,” he said on Monday, “then it’s much more difficult for us to create good jobs here at home.” There’s still a chance that Europeans, through some combination of fiscal and monetary action, can stop the crisis before it shatters the feeble U.S. recovery. But the worst case is so much worse than Obama’s description, and Washington has failed to prepare voters for the possibility. “The [potential] shock we’re talking about is of very large magnitude,” says Viral Acharya, a New York University professor who studies financial risk extensively. “If you’re just having an Armageddon coming your way, [America’s] buffers may not be adequate.”

The eurozone’s struggles are already hurting the U.S. recovery. Stocks have fallen, and exports to the European Union—the world’s largest economy—are dropping as the Continent slides into recession. In the best case, the pain inflicted on the United States basically stops there. Europeans marshal the political will to bail out Italy and Spain, and they wall off Greece from the financial system at large. Lending slows but doesn’t stop. The European recession proves comparatively mild, and America avoids one.

But the situation could worsen quickly for the United States. The biggest risk is a massive credit freeze. Loans from European banks account for one-fifth to one-quarter of the American lending market, Acharya says, and loans from those banks would disappear fast if they begin tumbling under bad sovereign debts. American banks would likely pull back on lending, too. Consumers and businesses would curb spending. “The precipitating event for the global financial crisis and the Great Recession was the bankruptcy of a single, relatively small broker-dealer, Lehman Brothers. The bankruptcy of a nation as large as Italy would be many times more severe,” says Karl Smith, an economist at the University of North Carolina who co-writes the popular economics blog Modeled Behavior. “In theory, there is no limit to how bad it could get.”

Early warnings of economic doom will show up in indicators of credit stress—signs that lending has tightened here—such as the LIBOR rate (the amount of interest that banks charge to lend money to one another) and the TED spreads (the difference between those interbank rates and the return on U.S. government debt). Those indicators are already rising methodically. When they spike toward 2008 levels, watch out.

If things go sour across the Atlantic, Smith and other economists say, American policymakers will face recourses that are all unpalatable to the public. The Federal Reserve Board could buy boatloads of European sovereign debt or lend, ad infinitum, to European banks. Or the Treasury Department could threaten to devalue the dollar unless the European Central Bank agrees to act as a lender of last resort for its member governments. If the crisis spreads to the United States, the possible responses aren’t any more feasible: nationalizing banks; forcing a currency war with China; enacting large deficit-financed tax cuts to stimulate growth.

Voters will detest those choices. Americans of all political stripes feel burned by the bailouts of 2008 and have no desire to save the financial sector again. Jobs are hard to find; the federal deficit has ballooned; housing values have fallen; and median incomes have stagnated. American taxpayers are already weary of helping distressed homeowners in this country. They won’t want to bail out Greek or Italian borrowers.

Why hasn’t Washington laid the groundwork for potential domestic fallout? Administration officials say privately that voters don’t want to hear the president blame other countries for America’s plight. It’s also possible that girding for the worst here could sap consumer confidence, which just recently rebounded from the debt-ceiling despair of August. On the other hand, imagine if policymakers sprung a worst-case rescue plan on voters out of the blue. The reaction would be politically paralyzing.

Congressional leaders, for their part, aren’t warning anyone about Europe, except to reiterate bipartisan opposition to bailing out the Europeans. House and Senate leaders aren’t drawing up contingency plans in the event of a spiraling crisis, according to a survey of leadership offices. And the administration has settled on a tightrope strategy, underscoring the severity of the European threat but contending that the United States can inoculate itself through growth-oriented fiscal policies. “Europe’s financial crisis poses the most serious risk today to the global recovery,” Lael Brainard, Treasury’s undersecretary for international affairs, told a Senate panel in late October, adding that pro-growth policies “provide the best insurance policy to protect the U.S. recovery from further risks from beyond our shores.”

Boosting growth is a worthy goal. It is not, however, a firewall against a European crisis. If banks start failing, credit contracts, and a depression looms, policymakers need to be ready to take much more decisive action—and the public needs to be prepped on what’s at stake.

Re: EUEUEUEUEU is *this close* to bringing down US/global economy

In case stratfor didn't tell you, we bailed them out on Thursday. And now everybody's pissed at Merkel over there ... if we could just get you to stop reading fascist propaganda, you might have known already.

Re: EUEUEUEUEU is *this close* to bringing down US/global economy

Well, round 1 of bailout took place. There will be more rounds. But I think the Europeans are coming around to a realization that it's necessary. Basically, Italy is solvent, unlike Greece. So if you bail them out you get your money back in the long run, with interest.

S&P to Put Entire Eurozone on Watch for Downgrade

By NICOLE LUNDEEN, JEANNETTE NEUMANN and JAVIER E. DAVID

The 17 nations of the eurozone will be placed on "credit watch negative" by Standard & Poor's Rating Services, according to people familiar with the matter.

The ratings firm is expected to make an announcement after the market closes in New York at 4 p.m. S&P is expected to cite the difficulties of the euro region in containing its debt crisis.

The decision to put the countries on negative credit watch—which signals a downgrade within 90 days has 50-50 odds—would hit six countries with the rating firm's highest, triple-A rating: Germany, France, the Netherlands, Austria, Finland and Luxembourg.

A spokesman for Standard & Poor's declined to comment, saying, "We never comment about market rumors about our ratings."

The expected move comes ahead of this week's European Union summit. On Friday, eurozone officials are expected to lay out plans to enforce stricter budget rules across the currency bloc in an effort to keep the Continent's turmoil from worsening.

The yields on bonds issued by financially stressed European governments such as Italy and Spain have soared in recent months amid questions about growth prospects, debt loads and budget deficits. Rising yields make it costlier for governments to borrow and can slow growth at a time when the region is already dealing with high unemployment and near recession conditions.

The meeting comes on the heels of a coordinated action by the world's central banks to make dollars available to banks at a lower cost. The move, made last week, has helped lower bond yields in Europe by allaying fear that national governments won't be able to fund themselves.

Over the course of the year, European officials have met repeatedly to address the debt crisis. Yet optimism that has followed news of apparent breakthroughs has repeatedly given way to further market unrest, as details fell short of what the market expected.

The S&P move follows an August decision by the rating firm to downgrade the U.S. debt rating to double-A-plus from triple-A after contentious debt-ceiling talks.

Current European regulation requires credit-rating firms to let issuers know of any rating action 12 hours before that change is reported to the broader market. European regulators last month proposed that rating firms notify issuers "a full working day" before publication of a rating action "to leave the rated entity sufficient time to verify the correctness of data underlying the rating."

The rating firms have expressed concerns that 12 hours is already too generous and heightens the possibility that a government could leak an impending downgrade or outlook change.

David H. Levey, a former sovereign-debt analyst at Moody's Investors Service from 1985 until 2004, said rating firms typically used to notify countries of a downgrade or outlook change one to two hours ahead of time because of concerns about leaks to the media and the potential for insider trading by government officials. "The longer the period of pre-announcement, the greater are both of those risks."

European financial crisis? Not in Berlin

By Bruno Waterfield6:30AM GMT 05 Dec 2011

If Europe is on the brink of an economic catastrophe; it certainly did not feel like it among the revellers who flocked at the weekend to the Christmas market on Berlin’s Alexanderplatz. Germany’s chancellor, Angela Merkel, has issued dire warnings that the euro crisis poses an “existential” threat for peace and prosperity, tearing down the global economy and the Continent’s nation states with it. Now, ahead of this week’s make-or-break summit in Brussels, the rest of Europe is looking to the Germans to ride to the rescue.

But the mood was not so much pessimistic as hedonistic among Berliners taking time out from their shopping to relax with a warming glass of Gluhwein in the cold rain. “We don’t want to talk about the eurozone crisis. We are here for the shops and now it’s time to get drunk. We don’t want to talk about all that bloody crisis stuff,” cried a group of women, sentiments that raised a cheer on tables nearby. In fact, among the shoppers, the international pressure pushing Germany into a historical leadership role that its people do not want seems more likely to generate resentment and feelings of injustice than anything else.

Veronica Kampf, 20, a student from Munster, mingled with the crowds dressed as Santa Claus to hand out chocolates and leaflets. A Christian campaigner, she was there with other young people from Papenburg’s Josua church to talk to consumers about the real message of Christmas. “It’s not fair that we Germans are always asked to save the world. It’s stupid and it is everyone’s responsibility, not just Germany’s. We already pay enough taxes,” she said. “I’m more concerned that some people are more interested in Coca-Cola and shopping than knowing what Christmas is really about than this crisis.”

Under an animated, stuffed reindeer head, singing Jingle Bells and We Wish You a Merry Christmas, Florian Schmidt, 24, put down his mulled wine to get serious. He doesn’t buy the argument that Germany’s historical mission is to save Europe. “I don’t think Germany should have the main responsibility for saving Europe. The EU is supposed to be a community of independent states, so there should be equality. All countries need to share the responsibility to save Europe — not just Germany,” he said. “Why just us? Why are we so special?”

Schmidt said that he and other young Germans were sick of being told that Germany’s history meant it has an extra duty to act. Last week, Radek Sikorski, Poland’s foreign minister, made a dramatic demand that Germany step in to save the euro. “Your size and your history” mean a “special responsibility to preserve peace and democracy on the Continent,” he told a Berlin audience. “I demand of Germany that, for your sake and for ours, you help. You know full well that nobody else can do it. I will probably be the first Polish foreign minister in history to say so, but here it is: I fear German power less than I am beginning to fear German inactivity.” Young Germans are much less haunted by history, and Schmidt said that he found the Polish speech “too much”: “We have been feeling guilty for over 60 years. It’s over; we’ve had enough of being guilty. We’ve had to get over it; why can’t everyone else?”

The rejection of Germany’s historical burden for instigating two world wars and for the Holocaust was unanimous on the Alexanderplatz. The view of Andreas Dirksen, 29, watching his daughters on the carousel of a traditional roundabout, was typical. “I am the third generation after the war. It is now time to stop the guilt tripping,” he insisted.

Both Dirksen and Schmidt also rejected another historical argument — one that is often made by Chancellor Merkel when she refuses to let the European Central Bank print the hundreds of billions of euros that many believe is the answer to the crisis.

In a speech to the Bundestag in October, the German leader warned that ECB involvement raised the specter of 1920s stagflation leading to the economic slump and the collapse of the Weimar Republic that ushered in Nazi rule and the Second World War. “No one should take for granted that there will be peace and affluence in Europe in the next half century,” she warned.

But Dirksen was not impressed. “The Weimar days will not be repeated,” he said. “The state and institutions are stronger and better prepared. History will not repeat itself; it doesn’t work like that. People inside and outside Germany are exaggerating and using history to scare us one way or another to suit their own agendas.”

One reason why Germans do not feel the heavy hand of history on their shoulders is because their country’s economy has been performing so well and, as a recent opinion poll found, a majority simply do not feel “personally affected by the crisis”.

This weekend, the popular magazine Der Spiegel noted with bemusement that Germans were far more sanguine about the looming euro calamity than they have been over bird flu or nuclear power, which was abandoned after the tsunami in Japan damaged the Fukushima nuclear reactor. These events triggered “hysterical over-reaction,” suggested Der Spiegel. “Shouldn’t Germans be panicking these days because the euro could soon be history? Europe worries about its money — Germans go shopping.”

Indeed, unlike in the rest of Europe, Germany’s Society for Consumer Research (GfK) is predicting a bumper Christmas for retailers this year. Mind you, pollster Klaus-Peter Schoeppner thinks this spending spree is a “flight from the real world” and that people will wake up with a hangover when an expected recession bites next year. “We bail out banks, we save states, we save Europe – but people ask what will become of me,” he said. “The sense of injustice is growing.”

Nevertheless, and contrary to the tabloid headlines, Berliners did not blame highly indebted Greece for triggering the crisis with profligate spending. Eating his bratwurst washed down with a glass of Berliner Pils, Klaus Hoehbauer, 48, a middle school teacher from Straubing in Bavaria, insisted that it was not the fault of Greece that the euro had not been built on “fiscal union”. He supports a new EU treaty “to put it right”.

“To blame only the Greeks is not fair. When they were taken into the euro system the situation of Greece should have been looked at properly and the rules complied with. We have to change the treaties. Doing what we are doing at the moment is just about buying a little more time,” he said.

In fact, many people are more annoyed with the French, “who are like us”, than with the allegedly feckless southern Europeans, who have a “different mentality”.

A particular grievance is pensions. Germans must work until they are 67, whereas the French can retire at 62 or earlier. Like most Germans, Dirksen said he supported tougher spending rules in the eurozone but also a “level playing field” in social benefits as a condition of Germany acting to help. “We have to save the euro. But in return the rules must be changed. Otherwise we are the stupid ones who work and pay off all the debts until we are 67 while our French neighbors can finish at 62. There should not be exceptions on pensions,” he said. Drinking in an Alexanderplatz bar with her daughter, Grit Rauchfuss, 48, from Thuringa in eastern Germany, said that she felt a strong sense of injustice over calls for Germany, “always us”, to make sacrifices to save the euro.

“In France and all those countries they hold big demonstrations about changing pensions while we stupid Germans pay all the bills. Even in our country we have poor people and bad social conditions. If Germany has to pay everything then the German people will suffer and our social services, our pensioners’ houses, our schools will get worse,” she complained.

Rauchfuss is among the growing number of Germans who now regret giving up the Deutschmark for the euro. An opinion poll in September suggested the number who wanted the old currency back were now in a majority. “It was a mistake,” she said. “Everything got so expensive afterwards — and before the euro, we didn’t have these problems with an economic crisis.”